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Monthly Archives: January 2015

2014 was the year of the data breach. One after another, big brands were subjected to malicious attacks by hackers that not only compromised countless pieces of customer data, but almost-irreparably damaged these brands.

Here are some of the more notable businesses affected by cyber criminal attacks during 2014:

1. Ebay

In May, eBay revealed that hackers had managed to steal the personal records of 233 million users. Usernames, passwords, phone numbers and physical addresses were all compromised. But the biggest victim: Ebay’s ego.

2. JPMorgan

Tens of millions of Chase customers were affected when accounts were infiltrated—even if their bank accounts weren’t. The attack touched 80 millions households and 7 million businesses, making it one of the largest in history.

3. Target

Last spring, Target confirmed that a large data breach from late 2013 affected 40 million customers. The company later announced that more data was compromised, reaching 70 million people. Proving that the shame is 100% on them for exposing customers twice.

4. Home Depot

Home Depot announced last September that their massive data breach allowed cyber criminals to harvest information from 56 million customers in the United States and Canada. Vendor credentials were used to steal customer data.

5. Staples

Staples confirmed its payment system’s data breach–an incident in which 1.16 million credit and debit cards used were stolen over a period of up to six months. The criminals behind the breach have been accused of already using the card data for fraud.

6. U.S.P.S

Hackers attacked the United States Postal Service’s online network. Blame was quickly placed on hackers based out of China. The damage? 800,000 employees’ data was compromised, including Social Security numbers and addresses.

7. Domino’s Pizza

A “hacking group” held Domino’s Pizza hostage, demanding ransom for over 600,000 customer records obtained through a data breach. In exchange for the personal data (names, addresses, emails, phone numbers and even favorite toppings), the hackers demanded $40,000 from the pizza chain.

8. Verizon Wireless

Verizon Wireless experienced 1,367 data breaches and more than 63,000 security incidents in 95 countries during 2014. The company released their annual security report that painted a picture of the reality of data security (or lack there of) and the state of cyber crime.

9. Jimmy John’s

Customers who swiped their cards inside one of 216 Jimmy John’s stores were affected by last year’s data breach. Cards entered manually or online were not included in the attack. The information exposed may include the card number and in some cases the cardholder’s name, verification code and/or the card’s expiration date.

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Data breaches are the new normal.

So what can you learn from these big brands’ data breach incidents? That no business is truly immune from being the victim of a data breach–but you can practice best standards and practices by having a response plan in place.

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With its Apple Pay product, Apple is kick-starting the scan vs. swipe revolution that credit card and mobile wallet companies have been trying to usher in over the past few years. Scanning, which allows brick-and-mortar businesses to be more competitive with ecommerce ones, was made possible through the development of near field communication (NFC)­—a technology that allows ­two devices to communicate and exchange information with one another wirelessly.

Stores and businesses equipped with NFC technology can scan a customer’s card or smartphone for payment instead of swiping their credit card through POS systems. So how do NFC payments benefit you and why are merchant services companies promoting it?

Ease of Use

NFC is easy for both retailers and customers to use. Set up and installation is simple and your merchant services provider can answer any questions you have. Consumers simply scan their credit card or smartphone for payment. For smartphone users, there’s the extra benefit of not having to carry multiple store and credit cards in their wallets. They can pre-load all payment information to a mobile wallet app on their smartphone.

Cost Reduction

Businesses that want to offer NFC payments as an alternative to traditional credit card processing will have a one-time cost of purchasing the readers. Readers are reasonably priced and can be obtained from your merchant services company. Reduced paper product use will save you money and attract customers who prefer to do business with environmentally conscious companies. Aside from the purchase of the reader, NFC payments can cost you less annually than standard credit card processing.

Payment Processing on the Go

Since there are no paper receipts requiring signature, payment processing via NFC is much faster. Businesses equipped with NFC readers can handle more customers in a day than those with standard POS systems. Customers who like the ease of online payments will be drawn to businesses that offer self-service NFC readers at their checkouts. Service professionals and salesman in the field who have mobile merchant accounts can also take advantage of NFC.

Advertising and In-Store Marketing

NFC lets customers quickly and easily redeem coupons and gift cards, and add to loyalty reward programs—benefits that are unavailable with traditional credit card processing. Besides these wins for customers, you can use NFC to offer discounts for and promote your products and services. Retailers can also take advantage of NFC’s in-store marketing capabilities. As customers near certain products or areas in a store, NFC can send targeted coupons or product information to their mobile devices. Through various mobile programs and apps, customers can trade discounts and offers with other users.

Improved Security

Magnetic stripe readers are subject to counterfeit cards and skimming. Enhanced security technology that can eliminate these types of fraud is compatible with NFC’s wireless communication, but not with magnetic stripe readers. Reduced fraud means fewer chargebacks and more profits for merchants.

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The holiday season has once again come to an end. Whether your customers used in-store credit card processing systems or visited your ecommerce site, you don’t want to see your holiday profits whittled away by subsequent chargebacks.

Common Reasons for Chargebacks

Before we discuss how to prevent chargebacks, let’s look at the most common reasons that chargebacks occur.

Fraudulent card was used

Cardholder disputes merchandise quality

Incorrect amount was charged to the card

Errors occurred during credit card processing

Proper authorization wasn’t obtained

General Prevention Tips

Here are some general chargeback prevention tips that apply to merchants who accept online payments as well as swipe cards on POS systems.

Be sure the customer recognizes the business name you give to your merchant services company. Many chargebacks occur because customers don’t recognize the business name that appears on their statement.

Respond to retrieval requests in a timely manner. If you don’t respond within the number of days allowed in your merchant services agreement, it’s likely a chargeback will occur.

Get an authorization 100 percent of the time. Failure to get an authorization will result a chargeback.

Prevention Tips for Swiped Cards

Following are tips that merchants who process cards through POS systems or mobile merchant accounts can follow to lessen the chance of a chargeback occurring.

Swipe all cards through your credit card processing terminal. Doing so proves the card was presented at your store. If you have to get an imprint because your terminal is down, be sure all information appears: amount, business name, business location and signature.

Always compare the signature to the back of the card. Understandably your cashiers want to get customers through their lines quickly, but it only takes a few extra seconds to check the signature. Your cashiers should check the signature against a photo ID if there’s no signature on the back of the card.

Ask for another form of payment if the card is declined. Don’t continue to swipe the card.

Get an authorization for the full sale amount – don’t break the sale amount into smaller amounts.

Prevention Tips for Online Businesses

Here are some helpful tips that online merchants can follow to prevent chargebacks.

Make sure your customer is giving you the correct billing address by using the Address Verification System (AVS).

Provide your merchant services company with a telephone number that it can print on your billing statement. This increases the likelihood that the customer will call you and determine what the purchase is before disputing it with their card issuer.

Use shippers that provide proof of merchandise delivery to the full billing address. This will help you in case of a dispute. Require a signature for expensive merchandise to be left with the purchaser.

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Apple’s new mobile payments service, Apple Pay, allows consumers to use certain mobile devices to make payments in an easy, secure and private way. Here are a few benefits.

1. Better Than a Mobile Wallet

Apple Pay isn’t exactly a traditional mobile wallet, it’s a mobile payment enabler, and that makes it easier to use for customers. Users can keep their current credit cards without worrying about having to store money in a separate digital account. It’s one advantage that Pay has over mobile wallet systems like MCX–a retailer effort to enter mobile payment markets that requires users to create an entirely new account.

2. Touch-to-Pay is Simple and Speedy

Perhaps most importantly for users, Apple’s touch-to-pay system works, and works fast. You touch your phone to a sensor (this helps remove NFC interference issues) and tap the iPhone’s main button. Sometimes a PIN is required, but the process is fast and dependable. This compares favorably to options like CurrentC, the latest MCX project that works with less dependable and unnecessary QR codes.

3. Timing is Everything

Apple is well-positioned to see quick growth in Apple Pay. Mobile payments have been around long enough for most users to become acquainted with them; currently, they have an estimated 42% of American smartphone users and a large Passbook customer base to draw from. Perhaps even more importantly, Apple has released Pay just ahead of the massive upgrades that U.S. merchants will need to make to their credit card systems–upgrades that could go a lot more smoothly if merchants also upgraded to Pay at the same time.

4. Start Big, Go Small

When Apple first announced Pay, it opened with compatibility for around 220,000 stores in the United States. This is a fairly small start, but it shows Apple’s intent: Start with the big guys, then expand outward into smaller retailers and chains as Pay evolves. By first recruiting more of the top 100 retailers in the U.S., Apple has given Pay a momentum boost right out the starting gate. People are already used to it, and retailers are already working on management systems for it.

5. Security is More Important Than Ever

Apple Pay dodges many security vulnerabilities by utilizing tokenization. This helps reduce the amount of sensitive data transferred and makes that data as useless as possible to hackers. It also introduces new security in the form of Touch ID and similar features. In a world where big seller databases are being hacked increasingly often, this is a welcome benefit for all users.

Stay up-to-date on payment processing trends by following Abtek on Twitter and Facebook. Sign up to receive our newsletter, too.

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While the world was celebrating the arrival of 2015, hackers eyed a new data breach target: Restaurant chain Chick-fil-A. Jamie Condliffe at Gizmodo reports:

Chick-Fil-A has admitted that it’s “received reports of potential unusual activity involving payment cards used at a few of our restaurants.” Further reports suggest that the fast food chain is the common link in the loss of 9,000 sets of card details.

Chick-Fil-A learned on December 19th that suspicious payment activities were happening at some of its outlets, and its since been working with authorities to find out what’s happening. Some digging by Brian Krebs reveals that “nearly 9,000 customer cards [were] listed in that alert, and that the only common point-of-purchase were Chick-fil-A locations.”